Corporate Transparency Act (BOI Filing)
The Corporate Transparency Act (CTA) mandates that certain U.S. business entities report their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This requirement aims to enhance transparency and combat financial crimes by identifying individuals who own or control companies.
Recent Legal Developments:
December 3, 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction, temporarily halting the enforcement of the CTA’s BOI reporting requirements. The court expressed concerns about the law’s constitutionality and its impact on small businesses.
December 23, 2024: The Fifth Circuit Court of Appeals lifted the injunction, reinstating the BOI reporting requirements. The court indicated that the government is likely to succeed in defending the CTA’s constitutionality.
Updated Reporting Deadlines:
In response to the legal proceedings, FinCEN has adjusted the reporting deadlines:
Entities Created Before January 1, 2024: The deadline to file initial BOI reports has been extended to January 13, 2025.
Entities Created Between January 1, 2024, and January 1, 2025: These entities have 90 days from their formation date to submit their BOI reports.
Entities Created On or After January 1, 2025: The reporting deadline is 30 days from the effective date of their creation or registration.
Compliance Recommendations for Small Business Owners:
- Contact us today at team@northernct.com and we can handle your filing ensuring you’re in compliance with the reporting requirement.
Non-compliance with BOI reporting requirements can result in significant penalties, including fines and potential imprisonment. Therefore, it’s crucial for small business owners to understand their obligations and adhere to the updated deadlines.
